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Endogenous R&D symmetry in linear duopoly with one-way spillovers

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  • TESORIERE, Antonio
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    Abstract

    A duopoly model of cost reducing R&D-Cournot competition is extended to study the endogenous timing of R&D strategic investment. Under the assumption that R&D spillovers only flow from the R&D leader to the follower, sequential and simultaneous play at the R&D stage are compared, in order to assess the role of technological externalities in stimulating or attenuating endogenous firm asymmetry. The only timing structure of the R&D stage sustainable as subgame-perfect Nash equilibrium involves simultaneous play and zero spillovers.

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    Bibliographic Info

    Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2005045.

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    Date of creation: 00 Sep 2005
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    Handle: RePEc:cor:louvco:2005045

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    Related research

    Keywords: endogenous symmetry; endogenous timing; Stackelberg equilibrium;

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